Income Taxes

12 Months Ended

Dec. 31, 2015

Income Tax Disclosure [Abstract]

Income Taxes

11. Income Taxes

The significant components of the Company’s net deferred tax assets are as follows for the years ended December 31:

	2015			2014
Deferred tax assets:
Net operating loss carryforwards	$	16,922,143		$	17,317,362
Accrued expenses and reserves		196,607			188,626
Compensatory stock options and warrants		192,648			147,712
Capital Loss Carryover		—			1,549
Other		5,406			2,308
Total deferred tax assets		17,316,804			17,657,557
Valuation allowance		(17,316,804	)		(17,657,557	)
Net deferred tax assets	$	—		$	—

FASB ASC 740, Income Taxes, requires a valuation allowance to reduce the deferred tax assets reported if, based on the weight of the evidence, it is more likely than not that some portion or all of the deferred tax assets will not be realized. After consideration of all the evidence, both positive and negative, management has determined that a full valuation allowance of $17,316,804 and $17,657,557 against its net deferred taxes is necessary as of December 31, 2015 and December 31, 2014, respectively. The change in valuation allowance for the years ended December 31, 2015 and 2014 is $294,436 and $950,505 respectively.

At December 31, 2015 and December 31, 2014, respectively, the Company had $46,014,496 and $46,924,149, respectively, of U.S. net operating loss carryforwards remaining, which expire beginning in 2017.

As a result of certain ownership changes, the Company may be subject to an annual limitation on the utilization of its U.S. net operating loss carryforwards pursuant to Section 382 of the Internal Revenue Code. A study to determine the effect, if any, of this change, has not been undertaken.

Tax returns for the years ended December 31, 2015, 2014, 2013, 2012 and 2011 are subject to examination by the Internal Revenue Service.

A reconciliation of the Company’s income taxes to amounts calculated at the federal statutory rate is as follows for the years ended December 31:

	2015			2014
Federal statutory taxes		(34.00	)%		(34.00	)%
State income taxes, net of federal tax benefit		(3.63	)		(3.63	)
Nondeductible items		0.72			0.72
Change in valuation allowance		36.91			36.91
		—	%		—	%